"People often look at returns and say this is a great deal, but we teach in finance that return is a compensation for risk," Kostovetsky said. "These are stakes in platforms that have not yet been built, that have no participants yet. There’s a lot of risk. The majority of ICOs do fail."
Kostovetsky is an assistant professor at Boston College’s Carroll School of Management, and Benedetti is a finance PhD student at the school.
This article was provided by Bloomberg News.